SkyWest Airlines 2002 Annual Report Download - page 51

from Delta and Delta provides certain services to the Company, including advertising, reservation and
ground handling services. Expenses paid to Delta under these arrangements were $75,000, $8,924,000
and $6,741,000 during the years ended December 31, 2002, 2001 and 2000, respectively. United also
provides services to the Company consisting of reservation, passenger and ground handling services.
The Company paid $10,602,000, $8,884,000 and $7,199,000 to United for services during the years
ended December 31, 2002, 2001 and 2000, respectively.
The Company’s President, Chairman and Chief Executive Officer, serves on the Board of Directors
for Zion’s Bancorporation (‘‘Zion’s’’) and The Regence Group (‘‘Regence’’). The Company maintains a
line of credit (see Note 2) and certain bank accounts with Zion’s, Zion’s is an equity participant in
leveraged leases on two CRJ aircraft operated by the Company and Zion’s provides investment
administrative services to the Company for which the Company paid approximately $165,000 and
$173,000 during the years ended December 31, 2002 and 2001, respectively. The balances in the Zion’s
accounts as of December 31, 2002 and 2001 were $4,923,000 and $15,390,000, respectively. Regence
provides administrative services and medical stop loss coverage for various health care plans for the
Company. The Company paid Regence $904,000 and $1,889,000 for these services during the years
ended December 31, 2002 and 2001, respectively.
ITEM 9. CHANGES IN AND DISAGREEMENTS ON ACCOUNTING AND FINANCIAL
DISCLOSURE
On June 24, 2002, the Company dismissed its independent auditor, Arthur Andersen LLP (‘‘Arthur
Andersen’’), and appointed KPMG LLP (‘‘KPMG’’) as its new independent auditor. These actions were
approved by the Company’s Board of Directors upon the recommendation of its Audit Committee and
were reported in a Current Report on Form 8-K, filed with the Commission on June 28, 2002, as
amended by an Amendment to Current Report on Form 8-K/A, filed with the Commission on July 15,
2002.
During the years ended December 31, 2001 and 2000, and the subsequent interim period through
June 24, 2002, there was no disagreement between the Company and Arthur Andersen on any matter
of accounting principles or practices, financial statement disclosure, auditing scope or procedure, which
disagreement, if not resolved to Arthur Andersen’s satisfaction, would have caused Arthur Andersen to
make reference to the subject matter of such disagreement in connection with its reports, and there
occurred no reportable events as defined in Item 304(a)(1)(v) of Regulation S-K promulgated by the
Securities and Exchange Commission.
The audit reports of Arthur Andersen on the consolidated financial statements of the Registrant
for the years ended December 31, 2001 and 2000 did not contain an adverse opinion or disclaimer of
opinion, nor were they qualified or modified as to uncertainty, audit scope or accounting principles.
During the years ended December 31, 2001 and 2000, and the subsequent interim period through
June 24, 2002, the date KPMG was appointed as the Company’s independent auditor, the Registrant
did not consult with KPMG regarding any of the matters or events set forth in Item 304(a)(2)(i) and
(ii) of Regulation S-K.
In connection with the preparation of the Current Report on Form 8-K, as amended, described in
the first paragraph above, the Company provided a copy of the foregoing disclosures to Arthur
Andersen, but Arthur Andersen declined to issue a letter as required by Item 304 (a) (3) of
Regulation S-K. The Registrant has been informed by Arthur Andersen that Arthur Andersen does not
have the resources available to take the actions necessary to prepare and issue such a letter.
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